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Uber, Postmates Agree on $2.65B All-Stock Deal

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Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#161

Post by twblalock »

dragonwriter wrote: post #133
twblalock wrote: post #131

Earlier quoted context omitted.

They don't have a moat. They are one of many similar players in the same space, which are interchangeable both to their workers and their customers, and they can only compete on price. Drivers often work for several of these companies at the same time, and customers will use whichever one is cheapest at the time they feel like placing an order. At the moment, with so many similar companies in the space, I don't see h…

> because price is all that customers actually care about Customers actually care about service, too, but the two-sided-market-drivers-aa-contractors models doesn’t really leave the parts of service that would matter in the hands of the delivery matchmaker, so it's true that all they have is price, not because it's all customers care about but because it's all the firm has any kind of control over, by design.

The service is the same with all of these companies. Someone brings a bag of stuff to your door. In my experience they are all about as fast each other.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#162

Post by Aefiam »

jhallenworld wrote: post #98

So city dwellers in the ancient Roman world did not have kitchens- possibly they ate out more than we do. So there must have been demand for food delivery... I wonder if they accomplished it with slaves? Well there is some history: https://www.thevintagenews.com/2019/01/08/food-delivery/ The Indian "dabbawala" maybe is where it has to go: some kind of standardized service where one driver can deliver to many people i…

> So city dwellers in the ancient Roman world did not have kitchens

Thats not true ( https://quatr.us/romans/roman-kitchens-houses-ancient-rome.h... ).

Rich romans did have kitchens, poor people could not afford one and instead made food in their appartment room or bought food from streetvendors or takeout food from thermopolia.

There was likely no demand for food delivery as poor people couldnt afford it and rich people had slaves to make their food.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#163

Post by didibus »

The part that's frustrating is that, prior to all these companies, most of the same restaurants I order from had free delivery, but you had to call in, no nice mobile app to go along with ordering, payments, showing the driver on the map, etc.

Now, you do get all that nice UX convenience, but you pay extra for it.

I feel like in the end, the issue here is that those companies are just a bit of a useless middleman, not providing enough added value.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#164

Post by jacquesm »

edoceo wrote: post #56
tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

> We used to joke that “we lose money on every transaction but make it up in scale. Ooof, I remember that from 2000. Does anyone look at unit economics? PT Barnum made a book called "the art of money getting" - which could help many, worth the read.

That quote is from Catch-22 I think.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#165

Post by WrtCdEvrydy »

randomsearch wrote: post #160
tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

Perhaps we’ll look back and say “food delivery was the pet food of the 2020 startup boom/bust.” I think these businesses are awful and probably unethical, but from the outside it would surprise me if a single winner could not make this business model work, once they had so much of the market that delivery schedules could reach high utilisation.

The issue is mostly limited by requirements to get food there quickly.

If we knew what we wanted ahead of time, scheduling delivery ahead of time would make it easy... since you could use a delivery route (to deliver 2-3 items nearby).

A single winner may be able to make it work since you can do 1-2 pickups and deliver to two nearby homes.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#166

Post by TomMarius »

tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

DameJidlo.cz is very profitable.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#167

Post by travbrack »

Ozzie_osman wrote: post #20
0zymandias wrote: post #18

I am bullish on this as a recent shareholder. We are now in the consolidation phase of delivery service where fewer companies mean less competition, more efficiency and better economics. This is where Dara’s strength is. He has a history of great dealmaking and acquisitions. I expect Uber to thrive as the industry consolidates.

A more cynical take on this might be that it's hard to actually turn a sustainable profit in this market unless you have monopolistic pricing power, and hence, consolidation. Less of "the strong get stronger" and more of "the unprofitable become few enough to become profitable"

Or some kind of automated delivery. Or both.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#168

Post by mathieuh »

ThrustVectoring wrote: post #114
bhl wrote: post #66

Earlier quoted context omitted.

I think a questions that’s going to pop up is, why does delivery work for a company like Dominos’s (vertical integration) but not Postmates (horizontal)?

I've worked as pizza delivery. The tipping and per-delivery payments to drivers is why it works. Roughly speaking, a delivery driver in my area nearly a decade ago earned roughly $20/hr after gas and car expenses, half in hourly wages @ state minimum and the other half in tips + $1/delivery payment. They also took about 3 deliveries an hour when fully utilized, which wasn't for 100% of their shift. The wait time got…

What about in countries where tipping is not normal? I live in the UK and lots of small family-run fish and chip shops and takeaways offer delivery, along with the bigger chains like Dominos.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#169

Post by verall »

fallmonkey wrote: post #157
0zymandias wrote: post #18

I am bullish on this as a recent shareholder. We are now in the consolidation phase of delivery service where fewer companies mean less competition, more efficiency and better economics. This is where Dara’s strength is. He has a history of great dealmaking and acquisitions. I expect Uber to thrive as the industry consolidates.

I'd like to provide an personal take on this - this will be a bad deal until Uber can be a super app doing 100x more things than it's doing today. So maybe never. Why? Because exactly in China there was consolidation of food delivery apps into like 3 or 4 of them from 100+. But all of them are still burning lots of money from investors, except one - Meituan-Dianpin which built on this super app (first think of it as…

The American equivalent would be Google, as for myself and many others the Google maps reviews have long replaced yelp/groupon/tripadvisor, as it perhaps surprisingly tends to have the most accurate information about local businesses. But Google does not get into delivery because in America, the math doesn't work.

When I was in HK, I used foodpanda, it was super cheap, I think $10HK. Deliveryman shows up on a scooter, and has at least one other persons food with him. The density supports it. American cities are built somewhat differently where most middle-class people don't live very close to most of the restaurants they wish to order food from.

I think it has much more to do with the terrible math involved with doing delivery in such spread out regions. There being a super-app that does everything does not matter.

Also in America food takes much longer to be ready than in Asia. I don't know why but it does add up.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#170

Post by richthegeek »

WrtCdEvrydy wrote: post #165
randomsearch wrote: post #160

Earlier quoted context omitted.

Perhaps we’ll look back and say “food delivery was the pet food of the 2020 startup boom/bust.” I think these businesses are awful and probably unethical, but from the outside it would surprise me if a single winner could not make this business model work, once they had so much of the market that delivery schedules could reach high utilisation.

The issue is mostly limited by requirements to get food there quickly. If we knew what we wanted ahead of time, scheduling delivery ahead of time would make it easy... since you could use a delivery route (to deliver 2-3 items nearby). A single winner may be able to make it work since you can do 1-2 pickups and deliver to two nearby homes.

Uber Eats has done this to me and it made me stopped using them.

Driver needs to wait for the second meal to be prepared, pack it together, take a detour to the other place and spend time delivering it.

So your meal arrives late, cold, and crushed after you paid full-price for the delivery.

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